The rupee gained 13 paise to 82.57 against the US dollar in early trade on Tuesday as the American currency retreated from its elevated levels.
Forex traders said a positive trend in domestic equities and fresh foreign fund inflows also supported investor sentiments.
At the interbank foreign exchange, the domestic unit opened at 82.59 against the dollar, then gained ground and touched 82.57, registering a rise of 13 paise over its previous close.
In initial trade, the rupee also touched a low of 82.61 against the American currency.
On Monday, the rupee fell by 12 paise to close at 82.70 against the US currency.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.16 per cent to 103.18.
Brent crude futures, the global oil benchmark, declined 0.70 per cent to USD 86 per barrel.
In the domestic equity market, the 30-share BSE Sensex was trading 315.74 points or 0.52 per cent higher at 60,747.58. The broader NSE Nifty advanced 37.75 points or 0.21 per cent to 17,808.65.
Foreign Institutional Investors (FIIs) were net buyers in the capital market on Monday as they purchased shares worth Rs 1,322.39 crore, according to exchange data.
"Global investors will now take cues from the US consumer inflation data due after Asian market hours on Tuesday.
"This print will be closely watched by the currency and bond as well the equity markets, an upward surprise on inflation will be a concern and will prompt the Fed to keep higher and for a longer period of time," said Sriram Iyer, Senior Research Analyst at Reliance Securities.
On the domestic macroeconomic front, retail inflation again breached the Reserve Bank's upper tolerance limit and touched a three-month high of 6.52 per cent in January, mainly due to higher prices in the food basket, including cereals and protein-rich items.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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